news, features, articles and disease information for the crop industry

USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed

08 August 2012

USDA GAIN: Indonesia Grain and Feed Update August 2012USDA GAIN: Indonesia Grain and Feed Update August 2012

Post estimates MY 2011/12 Indonesian total wheat imports to decrease by 1.5 percent to 6.5 million metric tons (MMT) due to a shift by several importers from importing wheat flour to wheat. Post expects that this may lead to increased Indonesian wheat imports in the future. However, during the current year, imports of both wheat and wheat flour will decrease slightly.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Post estimates that Indonesian corn consumption will increase to 6 MMT during MY 2011/12. This estimate is based on the Indonesian Feed Millers Association’s (Gabungan Pengusaha Makanan Ternak, GPMT) estimates that feed production is increasing. Post also estimates that MY 2011/12 Indonesian corn production will reach to 8.9 MMT, as a result Post further estimates Indonesian corn imports will decline to 2.0 MMT.

Post estimates MY 2011/12 Indonesian rice imports will decline to 1.25 MMT. Because weather conditions and yields are up, BULOG (the Indonesian National Logistic Agency) is procuring more rice through domestic sources.

Executive Summary:

In early July 2012, the Indonesian Meteorology, Climatology, and Geophysics Agency (Badan Meteorologi, Klimatologi, dan Geofisika, BMKG) predicted that Indonesia would experience a weak El Nino over July 2012. They further predicted that En Nino conditions would become more moderate by November 2012. Post expects that the El Nino phenomenon will delay planting for the first crop cycle of MY 2012/13 in some Indonesian major rice producing areas.

On June 20, 2012, the Indonesian Ministry of Public Works published a report on the conditions of Indonesian water reservoirs. The report stated that three major water reservoirs in West Java, 13 small water reservoirs in Central Java, one major water reservoir in Yogyakarta, and two major water reservoirs in East Java are on an “alert” status due to low water levels within the reservoirs.

The Ministry of Public Works is taking measures to minimize potential negative impacts from the coming El Nino such as:

  • Paying close attention to the weather prediction conducted by BMKG,
  • Intensively monitoring water elevation at water reservoirs,
  • Adjusting the water allocation management based on the rainfall and priorities of planting area,
  • Intermittent water management,
  • Reevaluating farmers planting plan, and
  • Minimizing leakages along the irrigation canals.



Based on the import realization, Post estimates that MY 2011/12 Indonesian wheat imports to decline by 1.5 percent to 6.5 MMT. The decline is due to lower imports of wheat flour. Due to issues stemming from the influx of Turkish wheat flour into Indonesia, several wheat flour importers have actually become flour millers and have begun importing wheat instead of wheat flour. Post forecast MY 2012/13 Indonesian wheat imports will slightly increase to 6.6 MMT due to growing bakery industry in large cities and diet diversification to more wheat-based food. During the period of January – April 2012, due to its geographic proximity to Indonesia and the noodle industry’s preference for Australian Standard White Wheat, Australia held the largest market share of imported wheat (75 percent), followed by Canada (15 percent) and the United States (9 percent).

Based on the Global Trade Atlas data during the period of January – April 2012 Indonesian wheat flour imports, Turkey held the largest market share of 49 percent, followed with Sri Lanka (39 percent), Belgium (4 percent), and Australia (3 percent).



Post expects that Indonesia’s corn production increased significantly over the past year. Favorable weather patterns provided better conditions for farmers in upland areas to grow corn during the second cropping season. Farmers in the irrigated lowland areas on Java continued to grow corn during the third crop cycle. More recent weather condition differed from 2009 and 2010, when Indonesia experienced higher levels of rain during the dry season. During those years, farmers in upland, non-irrigated areas continued to grow rice during the second cropping cycle due to the availability of water from rainfall. During the current marketing year, more farmers in upland areas may likely leave their field idle during the third crop cycle, as rainfall levels will be more limited rainfall. Furthermore, with the upcoming predicted weak to moderate El Nino, provincial food crops agencies on Java are encouraging farmers on semi irrigated areas to grow secondary crops during the third crop cycle. In areas where the dry season tends to come earlier, such as in East Nusa Tenggara, some parts of northern Sumatera, and some parts of East Kalimantan, farmers are currently in the second crop cycle and are growing secondary crops.

Farmers prefer to grow corn over soybeans, as corn provides higher yields and rates of return over soybeans. The first and major corn planting season normally takes place from November to February (49 percent). The second planting season takes place from March to June (37 percent). The last one occurs in July to September (14 percent). Greater use of hybrid corn continues, with reports indicating that upwards of 50 percent of the total corn area is planted with hybrid seeds. Better seeds, combined with fewer incidents of pest and disease problems will also increase yield per hectare.

Rice, Corn, and Soybean Prices in Jakarta Market

Source: Cipinang rice wholesale market; Market Information Center (PIP), Ministry of Trade; American Soybean Association (ASA).

Currently, prices of corn at farmer level are relatively stable and ranges from Rp. 2,450/kg ($258/MT) to Rp. 2,550/kg ($269/MT). The price of hybrid corn seed also went up. Currently, prices of hybrid corn seed ranges from Rp. 55,000/kg ($5.79/kg) to Rp. 70,000/kg ($7.37/kg) compared to Rp. 40,000/kg ($4.21/kg) to Rp. 60,000/kg ($6.32/kg) in 2011.

Given the aforementioned situation and referring to Indonesian official statistics figures, Post estimates MY 2011/12 harvested area of corn to increase to 3.14 million hectares compared to 2.85 million hectares in previous MY2010/11. In line with the increase in harvested area, Post estimates MY 2011/12 Indonesia corn production to increase to 8.9 MMT compared to 6.8 MMT produced in MY 2010/11.


Many, if not most Indonesian corn farmers continue to use composite seed, as there are local preferences to use composite corn for human consumption, and hybrid corn from hybrid corn for feed and livestock consumption. GPMT estimates that in CY 2012, feed consumption will reach approximately 12.3 MMT, excluding 1.2 MMT used for aquaculture feed. The poultry industry consumes approximately 83 percent of the total feed consumed. Aquaculture consumes 11 percent and the balance of 6 percent is consumed by cattle and swine.

GPMT reported that corn normally accounts for 50 percent of feed formulations, with soybean meal at 15-20 percent, corn gluten meal at three percent, CPO at two percent, fish meal at five percent, rice bran at 15 percent, wheat pollard eight percent and premix 0.6 percent. Based on the production estimates of local feed millers, Post estimates that in MY 2011/12 Indonesian corn consumption will reach six MMT. Because several new foreign investors are expected to begin producing feed in Indonesia, Post expects that the MY 2012/13 Indonesian corn consumption forecast will increase further to 6.2 MMT.

Rice, Milled


In MY 2011/12 Indonesian rice production is expected to be higher than MY 2010/11. Favorable weather led to a slight increase in harvested area and better yields are the primary drivers. Favorable weather patterns (increased precipitation) in eastern provinces of Indonesia to include West Kalimantan, South Kalimantan, Central Sulawesi, and South Sulawesi have allowed farmers to grow two crops of paddy on their rain-fed land. Favorable weather has also increased yield and paddy quality for farmers on Java, especially during the second cropping cycle. Farmers’ decision to grow secondary crops on irrigated land and to leave the land idle on upland area during the third crop cycle has reduced challenges associated with pests and disease. More sunshine during the day provides better photosynthesis, which leads to a higher milling rate; and better opportunities for sun drying harvested wet paddy.

Currently, the second harvest of paddy is still going on in major rice producing areas in Java as well as on some areas in eastern part of Indonesia. Some farmers who have finished their second rice harvest are planting secondary crops such corn, soybeans, and peanuts to continue with the third crop cycle on irrigated land. Some farmers on upland areas on Java will leave the land idle during this third crop cycle. The third harvest is expected to occur in late October 2012.

Post’s recent visit to major rice producing areas in West Java, Central Java, Yogyakarta, and East Java showed that farmers in irrigated areas are growing paddy for the second cropping cycle, while some farmers on upland rain-fed areas are growing more corn. Farmers report that thus far in this marketing year, there are less challenges associated with brown hoppers and rats attack as compared to the same period in the previous marketing year. However, farmers are not growing paddy at the same time resulted to scattered and continues harvest from one area to another. This has prevented prices from falling during the main harvest.

Given the above factors, Post revised the MY 2011/12 harvested area to 12,160,000 hectares compared to initial estimate of 12,100,000 hectares. Post also increased the MY 2011/12 rice production to 36.5 MMT of milled rice equivalent from earlier estimate of 36.3 MMT.


Some of the imported rice will be used in BULOG’s market operations as a mechanism to dampen the price of medium quality rice in the domestic market. During the period of January – July 2012, BULOG flooded the market with a total of 170,000 MT under market operations.

BULOG also uses stocks for its Rice for the Poor (Raskin) program. In MY 2011/12 BULOG distributed a total of 3.15MMT of Raskin rice to 17.5 million poor families. Each family received 15 kg of rice/month at the price of Rp. 1,600 /kg. As of early July 2012, BULOG has distributed a total of 1.7 MMT of rice under this Raskin program.

In line with the population growth, Post estimated MY 2011/12 Indonesian rice consumption to increase to 39.550 MMT from 39 MMT in previous MY2010/11. The consumption is forecast to increase further to 40 MMT in MY 2012/13.


In order to maintain BULOG minimal stock level of 1.5 MMT of rice by year’s end, in August 2011, the GOI authorized BULOG to import a total of 1.9 MMT rice. During the period of August – December 2011, a total of 1.2 MMT landed in the Indonesia. The remaining 700,000 MT arrived during the period of January – March 2012. BULOG stopped rice imports in early March 2012, as to avoid violating regulations prohibiting rice imports one month prior to, during, and two months after the main harvest season.

In MY 2011/12, BULOG intends to procure 4.5 MMT of rice. As of early July 2012, BULOG procured a total of 2.4 MMT from the domestic market, which is higher than the 1.3 MMT procured domestically over the same period last year. BULOG can only buy paddy or rice from farmers when the market price is lower or equal to the government’s official purchasing price (Harga Pembelian Pemerintah, HPP). BULOG’s aggressive approach to procure rice directly from farmers has made the HPP more competitive. With this success, BULOG is expected to import less rice over the last MY. Post recently learned that BULOG may sign an MOU with Cambodia to import 100,000 MT of Cambodian rice in August 2012. Provided this happens, combined with the aforementioned 700,000 MT, along with specialty rice imports, and small amounts of smuggling, Post estimates that MY2011/12 Indonesian rice imports will be approximately 1.25 MMT. Furthermore, due to declining levels of beginning stock of MY 2012/13, higher demand for specialty rice, and increased overall consumption, Post forecasts that Indonesia will need to import 1.45 MMT of rice in MY 2012/13.

The high price disparity between Indonesia’s most widely consumed domestically produced rice over Vietnamese 15 percent broken and Thai 15 percent broken rice will continue to provide incentives for unauthorized imports, especially through Indonesian border areas.

Rice Prices Comparison

Source: Cipinang wholesale rice market, The Rice Trader, processed by FAS Jakarta.


MY 2011/12 ending stock of Indonesia rice is estimated to be at 4.4 MMT, and forecast to further decline in MY 2012/13 to 2.7 MMT due to higher consumption and lower beginning stock of MY 2011/12.


The Indonesian National Statistics Agency (BPS) reported that the average price of wet paddy is slightly increasing from Rp. 3,726/kg ($392/MT) in April 2012 to Rp. 3,835/kg ($404/MT).

Average daily supply of rice from the major rice producing areas of Java to the Cipinang Rice Wholesale Market in Jakarta is increasing to 2,770 MT in July 2012 from 2,732 MT in June 2012. The price of medium quality rice at Cipinang whole sale market is slightly declining to Rp. 8,300/kg ($874/MT) in July 2012 compared to the average price of Rp. 8,210/kg ($865/MT) in May 2012.

August 2012

DOWNLOAD REPORT:- Download this report here

Share This

Related Reports

Reports By Country

Reports By Category

Our Sponsors